Overbilling in the healthcare industry continues to increase dramatically across the United States, to the tune of billions of dollars annually. The existing system has caused skyrocketing annual premium renewals for employers and sharply climbing out-of-pocket costs for plan members. These high costs have led to frustration, dissatisfaction, and the first reported ERISA breach of fiduciary duty litigation over alleged mismanagement of health plan funds. Adding to already egregious billing practices is the now routine practice of hospitals adding “facility fees” for patients receiving routine ..read more

As noted in a recent prior blog, the U.S. Court of Appeals for the Ninth Circuit has permitted a class action lawsuit under the Mental Health Parity and Addiction Equity Act (MHPAEA) and ERISA to proceed. Ruling on procedural grounds, the court found that it was sufficient for plaintiff Ryan S. to allege that United Health Group was applying an algorithm to mental health/substance use disorder (MH/SUD) claims that resulted in a stricter review for MH/SUD claims than for medical/surgical (M/S) claims. The plaintiff’s claim was adequate to overcome the insurer’s motion to dismiss, and thus, the ..read more

The U.S. Court of Appeals for the Ninth Circuit reversed a trial court’s dismissal of a class action lawsuit in which group health plan participants alleged that the insurer violated the Mental Health Parity and Addiction Equity Act (MHPAEA) and its fiduciary duties under the Employee Retirement Income Security Act (ERISA). The case is Ryan S. v. UnitedHealth Grp., Inc., 2024 WL 1561668 (9th Cir. 2024). The plan participant claimed that the insurer violated the MHPAEA by applying a more stringent standard of review to benefits claims for outpatient and out-of-network mental health/su ..read more

The Biden administration unveiled its FFY 2025 budget, which calls for $7.3 trillion in spending. In the proposed budget, Biden maintains his pledge to focus on expanding and transforming the nation’s mental health system. He cited the need for ensuring access to mental health care amidst a nationwide unprecedented mental health crisis affecting people of all ages. Biden also mentioned his intention to invest in the training of more mental health professionals and expand Certified Community Behavioral Health Clinics across the country. The 2025 budget asks for the U.S. Department of Labor (DOL ..read more

Aerospace and defense technology company L3Harris has agreed to settle an Employee Retirement Income Security Act (ERISA) class action lawsuit for $650,000. Plan participants in the company’s $5.2 million 401(k) plan claimed that the defense contractor violated ERISA by charging excessive fees and retaining expensive investment options. The case is Stengl et al. v. L3Harris Technologies, Inc. et al., case number 6:22-cv-00572, U.S. District Court for the Middle District of Florida. The settlement resolves the lawsuit before the court could ruling on a pending motion for summary judgment. The p ..read more

A three-judge panel of the U.S. Court of Appeals for the Fifth Circuit recently heard arguments in the federal government’s appeal of a lower court’s decision to vacate various Affordable Care Act (ACA) preventive care requirements. U.S. District Court Judge Reed O’Conner also issued a nationwide injunction preventing the Biden administration from enforcing the ACA preventive care requirements. The court based its decision on a finding that since recommendations from the U.S. Preventive Services Task Force (USPSTF) weren’t subject to approval by the U.S. Department of Health and Human Services ..read more

The Internal Revenue Service (IRS) has issued Rev. Proc. 2024-14, which contains the 2025 indexing adjustments to the dollar amount used to calculate employer shared responsibility payments under the Affordable Care Act (ACA). The ACA provides that applicable large employers (ALEs) can be responsible for an employer shared responsibility penalty under Code § 4980H(a) in some circumstances. More specifically, if ALES do not offer minimum essential coverage to at least 95% of their employees, along with their dependents, excluding spouses, and the employee receives subsidized coverage through an ..read more

Insurance plan participants urged a California federal court to certify a class of 8,000 members in their lawsuit against Cigna, claiming that class certification is the only efficient and cost-effective remedy. The plan participants claim that Cigna colluded with Multiplan, its third-party billing contractor, and Multiplan’s subsidiary, Viant, to underpay out-of-network claims for substance use disorder treatments. The case is RJ v. Cigna Behavioral Health, Inc. et al., case number 5:20-cv-02255, U.S. District Court for the Northern District of California. In their lawsuit, the plan participa ..read more

Before the Mental Health Parity Act of 1996 (MHPA), health insurance plans were not required to cover mental health care, which made treatment expensive and difficult to access. The MHPA was the first piece of legislation that attempted to resolve this issue. It provided that large group health insurance plans could not impose annual or lifetime caps on mental health benefits that are less favorable than caps on medical or surgical benefits. However, most health plans soon found other ways to circumvent the requirements of the MHPA. For instance, insurance carriers increased out-of-pocket maxi ..read more

The U.S. Department of Labor (DOL) recently filed suit against the Blue Cross and Blue Shield of Minnesota (BCBSM), alleging various violations of the Employee Retirement Income Security Act (ERISA). The outcome of this case is likely to be significant, as it raises issues concerning legal authority and fiduciary responsibility in the context of third-party administrators (TPAs) of self-funded employee welfare benefit plans. DOL vs. BCBSM In its complaint, the DOL alleges that BCBSM exceeded its scope of authority and failed to follow the required standards of conduct as TPA for self-funded em ..read more